Usually, investment clubs run in a democratic fashion. All the members, as a collective, elect their officers as a president, a treasurer and so forth. There is also a voting system, which they can vote on stocks, bonds or securities. Investment club officers research more on the stocks. Research may contain any number of different methods: looking at individual companies, stock market profiling etc.
To consider active and not a security, an investment clubs membership must all participate in the purchase and sell-off of stocks. On regular basis members contribute their capital. Depends on the clubs it may be weekly or monthly or so forth. Some of the clubs require the members who contribute $ 25 a week. Beyond all of these, the best advice is: do not invest beyond your means.
There are several guidelines for investment clubs which need to be in place so that the club runs and functions smoothly. All the members in the club should have a same philosophy about the investing. Each member of the club are required to have the same goal in their mind and same method should be followed to reach the goal. If some members of the group are interested in making only profit and not interested in learning about the details involved in investing, then there will be divided set of goals.
When you are thinking about long term goals, the investment club members should have the clear knowledge on what the long term goals are all about. There should be strong understanding of what is the amount of profits that are getting from the investment and what is the amount that should be reinvested back in to the stock market. The members of the investment club should communicate each other on regular basis to share the information. It is important that the members should have the mandatory meetings. If there is anything like taking a decision on the ongoing investments or the future investments, It is important to have the presence of all the members in this decision process. If the meeting is delayed due to missing of some member then it is risky to the investment club.
It is required that all the members of the investing club should be part of any purchase of the stock or sell, to take the final decision or study the stocks. The best means of communication between the members of the investment clubs is that every individual should have a computer with internet connection. So that they can communicate with other member of the club on frequent basis and also can have an eye on the stock market from their home. It will be important that investment clubs have accountability checkpoints for all investments, profits, losses and other money issues. And these check points should be available to all the members of the club. When all the members of the club expect and meet the same requirements and works together then they can get success easily and gain some profits.